Virgin Atlantic and Trainline investigated over ‘drip pricing’
Competition and Markets Authority reviews charges added later in buying process
The UK’s competition watchdog has launched a probe into three companies including Trainline and Virgin Atlantic over concerns about so-called drip pricing, where charges are added later in the buying process.
The Competition and Markets Authority announced the investigations on Wednesday into the train ticket booking platform and airline alongside Red Driving School over concerns that customers were not shown the total price upfront.
Drip pricing can give consumers the false impression that one company is cheaper than a rival and therefore hamper competition, the regulator said.
“At a time when many households are watching every pound they spend, it is important that people are not surprised by extra fees when booking train and coach tickets, holidays or driving lessons,” said Emma Cochrane, executive director for consumer protection at the CMA.
“The first price customers see should be the price they pay,” she added.
The latest probes follow the CMA’s action against ticket seller StubHub earlier this year. In June, the regulator ordered the company to pay out nearly £1.5mn in customer refunds and penalties for drip pricing.
If the CMA finds there have been infringements, it can order businesses to pay compensation to customers and issue fines of up to 10 per cent of their global turnover.
In a statement responding to the investigation, Trainline said it had “proactively engaged” with the CMA and was “taking steps to enhance the presentation of certain fees”.
“We will continue to work constructively with the CMA to ensure our customer experience remains both transparent and compliant,” it said.
Shares in Trainline, the only one of the three companies that is listed, fell 14 per cent in London on Wednesday.
Virgin Atlantic said: “We take our responsibility to customers incredibly seriously and we always want to ensure they can make an informed decision when booking a holiday with us. Mandatory fees are indicated at multiple stages throughout the booking journey. We are reviewing the points raised by the CMA carefully and will co-operate fully with its investigation.”
In a statement, Red expressed “disappointment to have been included in a wider investigation into drip pricing”.
It added: “As an organisation we have been . . . working closely with the CMA as we take . . . our obligations under consumer law with utmost focus and seriousness. We look forward to continued engagement to support the CMA to a swift conclusion of this investigation.”